We Energies asks Wisconsin regulators to ease data center credit standards
We Energies has asked Wisconsin’s Public Service Commission (PSC) to reconsider its recent ruling on electrical rates for data center customers, arguing that new credit rating requirements create an undue burden. The utility states that the current rule, which requires data center developers with credit ratings below A- to post financial guarantees, could discourage major investments in the state by companies like Oracle, which holds a BBB credit rating. This requirement would mean Oracle's subsidiary involved in the Port Washington data center project would need to provide over $100 million annually in financial guarantees.
We Energies has formally requested that the Wisconsin Public Service Commission (PSC) re-evaluate its recently approved electrical rate structure for data center customers. The utility claims that new credit rating requirements, implemented in April, place an unfair financial burden on data center operators and could deter significant investments in Wisconsin.
The PSC's ruling established a "very large customer" rate structure, mandating that utilities like We Energies bill data center customers directly for new energy generation infrastructure. Crucially, it also requires data center developers with credit ratings below A- to provide financial guarantees, such as cash or credit lines, to safeguard existing ratepayers from potential cost shifts if a developer faces financial difficulties. Oracle, which is collaborating with OpenAI and Vantage on a substantial data center campus in Port Washington, currently holds a BBB credit rating, one tier below the PSC's A- threshold. Under the current regulations, Oracle's subsidiary would be compelled to provide annual financial guarantees exceeding $100 million to receive service from We Energies.
Attorneys for We Energies filed a request on June 10, asserting that if the decision is not revisited, it could significantly restrict numerous investment-grade companies from investing in Wisconsin. They noted that other major technology firms, including Intel, Tesla, and Micron, also possess BBB credit ratings, highlighting the broader implications of the PSC's current policy.